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2 minutes read

Reasons Why General Motors Didn’t Succeed In India

| Published on January 19, 2020

The Indian Automobile Industry has been in the news for a very long time now, partly because of the earlier grand success of the industry, becoming the 4th largest in the world in 2017 and then now, struggling among the economic slowdown in 2020.

Yes, 2017 brought along one major change for the auto market too, the withdrawal of an age-old name that used to scare competitors.

Yes, General Motors took a decision to let go of Indian customers and exited India a couple of years ago. GM has around a 5% market share in 2010 which was seen dropping to approximately 1% in 2016. Yet, the Indian automobile market was still exponentially growing during those six years.

Why did GM take this step?

Indian Consumer wants

India is known for its huge population and diverse markets where each individual has a different taste and preference. This makes it difficult for General Motors or any other brand to manufacture products that meet each and every requirement and standards set by different sets of users and prospective buyers. Indian consumers especially the middle-class market that GM was targeting looked for aspirational, cost-effective and comfortable cars, something GM could never understand or deliver.

A struggling journey

There was a time during the launch of Chevrolet that GM tapped into the middle-class segment. However, later newer models of the brand failed to stay on track and were not enough to get car dealers to support GM. Without dealers and a sufficient market share, GM failed to generate revenue. Infact, due to the service requirements of GM cars, convenience for customers was also problematic.

Worldwide trends

GM was also restructuring its business during that time where many automakers were seen to be getting rid of sick businesses and looking for innovative options. GM withdrew from India by selling a factory to a Chinese automaker brand and even left the South African market.

Hence, it is just not a lost battle but also a strategic move by General Motors to reduce any losses and allow the company to venture into other businesses or successful markets.

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